The Industry Ministry will suspend debt payments for 12 months for SMEs that borrowed from the Pracha Rat fund.

The Industry Ministry will suspend debt payments for 12 months for small and medium-sized enterprises (SMEs) affected by the Covid-19 outbreak who borrowed money from the 20-billion-baht Pracha Rat fund.

The measure will cover over 5,600 businesses in the agriculture and processing, retail, services and tourism sectors.

Kobchai Sungsitthisawad, the industry permanent secretary, said local businesses can apply for debt suspension between April 10 to June 30 at the SME Development Bank.

“The cabinet has approved the rescue measures by suspending debt payments for 12 months for SMEs to fight the spread of Covid-19 and the drought crisis,” he said.

The government expects the measure will reduce the non-performing loan rate for SMEs.

Since 2017, the government has operated a soft loan scheme under the Pracha Rat fund with 20 billion baht for SMEs, in line with the Thailand 4.0 initiative.

“The Pracha Rat fund aims to support and help SMEs boost efficiency, productivity, quality, training programmes and marketing as many businesses struggle with slow growth and cannot access loans from financial institutions,” said Mr Kobchai.

He said the rescue measure will cover many provinces such as Bangkok, Samut Prakran, Songkla, Samut Sakhon, Pathum Thani, Nakhon Pathom and Phuket.

In February, the Industry Ministry teamed up with state agencies and business operators to help over 100,000 businesses access financing through the Pracha Rat fund.

The project included partners such as SME D Bank, the Thai Credit Guarantee Corporation, the Federation of Thai Industries, the Thai Chamber of Commerce, the Federation of Thai SMEs Association and the Thai Federation of Provincial Tourist Associations.

There are 5 million SMEs registered legally in Thailand.

The Industry Ministry recently announced it plans to roll out rescue measures by suspending debt payments for 6-12 months for 2,500 small community enterprises and SMEs through a revolving fund for household industries and handicrafts.

The measure covers businesses in food, drinks, herbs, jewellery, souvenirs and clothing.

Producers can apply for debt suspension in April.